March 19, 2003

A Cold War Legacy of Persian Gulf Conflict: “Oil as the Future”

By Jennifer Huang | World Power III: Geopolitics

page 3 of 3

Critics cite a January 16 article in the Wall Street Journal, describing a meeting between State Department officials and oil company executives.

“The Bush administration is eager to secure Iraq’s oil fields and rehabilitate them, industry officials say,” the article reads. “They say Mr. Cheney’s staff hosted an informational meeting with industry executives in October, with Exxon Mobil Corp., ChevronTexaco Corp., ConocoPhillips and Halliburton among the companies represented. Both the Bush administration and the companies say such a meeting never took place.”

Former Green Party presidential candidate Ralph Nader believes the meetings happened, and said that “41 members of the administration have ties to the industry.”

The meetings took place during the formation of Bush’s National Energy Policy, and included executives from companies like Halliburton (where Cheney was an executive officer) and ExxonMobil.

On January 22, Secretary of State Colin Powell told reporters that oil profits from post-war Iraq “will be held for and used for the people of Iraq. It will not be exploited for the United States’ own purpose.”

In his speech at the Hoover Institute, Defense Secretary Rumsfeld reiterated the point.

“It does not relate to oil. I mean, it just plain doesn’t,” he said.

Powell did not rule out the possibility that an occupying government might control oil revenue “in conducting activities that support the Iraqi people — for example, their humanitarian relief efforts,” he said.

Many observers also discredit the notion that the looming U.S. war on Iraq is motivated by oil.

“The region’s important because of oil, no doubt about that,” said Sarah Emerson, managing director of Boston-based Energy Security Analysis, Inc. “But the war is not about oil.”

Emerson said that the U.S. is not likely to profit from a war.

In the short term, invading Iraq would most likely cut off Iraqi exports. That amount is relatively small, about two million barrels per day.

But if it were coupled with the continued loss of Venezuelan oil (due to the recent general strike there), “the combination of the two of them begins to reach some critical mass that now begins to threaten the market.”

In the long term, if a postwar Iraq became investment-friendly for foreign oil producers, the increase in oil production might lower oil prices.

“It would actually hurt the bottom line of several oil companies,” Emerson said.

Hertzberg, the former Carter speechwriter, concurred.

“There are a hell of a lot easier ways to get oil than this,” he said.

While he agrees “oil is definitely a part of it,” Hertzberg said that concerns over weapons of mass destruction and terrorism are the administration’s main motivations.

The Sept. 11 attacks created deep-seated security concerns, said Patrick Garrett, an analyst at Globalsecurity.org.

“I think the Bush administration has come to the conclusion that it’s their responsibility to make sure that September 11 doesn’t ever happen again, and the only way that they feel they can accomplish that is to go ahead and start knocking off all the countries that they feel are a threat to the U.S.,” Garrett said. “So oil may play a role, but it’s never been a convincing argument to me.”

“Oil as the Future”

It is clear that the U.S. military, at any rate, has been thinking a lot about Iraq’s oil fields.

On January 24, the Department of Defense held a briefing on “Oil as a Weapon of Terror.”

A senior defense official, speaking anonymously, outlined the potential economic and environmental devastation if Saddam Hussein were to sabotage Iraqi oil wells during a war with the United States.

“It’s fair to say that our land component commander and his planning staff have crafted strategies that will allow us to secure and protect those fields as rapidly as possible,” the official said. “We feel it’s important to preserve those fields so that there is a potential for very rapid development of the economy in Iraq if the conflict goes on.”

The official denied that the strategy would be a grab for resources, and that an Iraq invasion “is not about oil as a commodity; it is about oil as the future — as it relates to the future of Iraq.”

He said that the postwar administration of the oil fields is the subject of a “study group” that would work with an “interagency organization,” but refused to comment on who is involved.

The Cato Institute’s Pena said only time will reveal the administration’s motivations.

“If it turns out that U.S. oil companies get to come in and take over all the business opportunities inside [a postwar] Iraq, then I think the people who’ve been critical will have some ammunition to support their criticism of the administration,” he said. “If it turns out that it’s much more international, and the Russians and French and other countries and their oil interests are participating, I think the case is less that this was all about U.S. control over the oil fields.”

Ironically, it was Jimmy Carter who decried the economic vulnerability caused by the American demand for foreign oil.

Six months before declaring the Carter Doctrine and laying the rhetorical groundwork for the founding of the Central Command, the thirty-ninth president said, “This intolerable dependence on foreign oil threatens our economic independence and the very security of our nation. The energy crisis is real. It is worldwide. It is a clear and present danger to our nation.”

Calling the situation an “energy war,” Carter outlined methods to wean America from foreign oil: import quotas, alternative energy development, conservation, gasoline rationing and solar technology that would provide 20 percent of the nation’s energy by 2000.

“I am tonight setting a clear goal for the energy policy of the United States,” he said. “Beginning this moment, this nation will never use more foreign oil than we did in 1977 — never.”

Carter’s vow lasted 14 years, until 1994. In 1977, the US imported 8,807,000 barrels of oil every day. After Carter’s speech, oil imports did decline to a low of just over 5 million barrels in 1983.

By 2002, that number had climbed to 11,619,000.

Now, as a Nobel Peace Prize laureate and elder statesman, Carter is denouncing the war, telling the Washington Post on February 1 that Bush has “not made a case for a preemptive military strike against Iraq.”

This time, it seems his words are not enough to stop the machine that he created, and tried to render obsolete, more than twenty years ago.

World Power III: 1 | 2 | 3

Comments are closed.